TOKYO, May 26 (Reuters) - Japan's Nikkei share average

gained for a second-straight session on Monday as easing trade

tensions between the United States and Europe supported risk

appetite.

Nippon Steel ( NISTF ) jumped as much as 7.4% after United

States President Donald Trump appeared to give his blessing to

the company's protracted takeover of U.S. Steel. Demand for

equities rose broadly after Trump extended a tariff deadline on

Europe, another backtrack from his sweeping "Liberation Day"

import duties announced last month.

The Nikkei 225 Index climbed 0.5% as of the midday

break, while broader Topix was up 0.25%. Japanese bonds

also rallied after a dramatic week that saw super-long yields

rise to records.

"The market is now becoming more and more doubtful about

(the) seriousness of the tariff policy, particularly after

(Trump) dropped the tariff rates on China," said Nomura chief

macro strategist Naka Matsuzawa.

"The bond market started to stabilise after steepening quite

a lot on the long end, rallying for two consecutive days, so I

think that gave relief to the stock market as well," he added.

The Japanese yen remained near a one-month high against the

U.S. dollar, curbing demand for export-related shares like Mazda

Motor ( MZDAF ), which lost 0.8%.

Nippon Steel ( NISTF ) pared its gains to just 1.6% at the break. The

largest percentage gainers in the Nikkei were CyberAgent ( CYAGF )

up 4.4%, followed by Keisei Electric Railway ( KELRF )

gaining 3.7%.

The biggest losers in the index were Konica Minolta ( KNCAF )

down 3.1%, followed by department store operators J.Front

Retailing and Isetan Mitsukoshi Holdings ( IMHDF ), both

down 2.9%.

(Reporting by Rocky Swift; Editing by Janane Venkatraman

)